CAPE TOWN — Health economist Nicola Theron on Thursday questioned whether the Competition Commission’s planned healthcare inquiry would address the problems facing South Africa’s health system.
The Competition Commission is deciding on the scope of an inquiry it plans to hold into the healthcare sector, a move many industry players fear may be the first step towards the government regulating prices.
"The question is whether competition issues are at the root of the cost issues (facing medical schemes)," Ms Theron told delegates to the annual Hospital Association of South Africa Conference. Ms Theron is the executive director of Econex, an economics consultancy.
Both Health Minister Aaron Motsoaledi and the Council for Medical Scheme have pointed fingers at the private hospital sector, arguing that rising medical scheme expenditure on private hospital bills is being driven by unfettered price hikes. Medical scheme expenditure on private hospitals has consistently risen more sharply than consumer price inflation for the past decade, according to the council’s analysis.
Ms Theron said Econex research showed 60% of the real increase in medical schemes’ expenditure on hospital fees was due to factors other than price, such as older, sicker patients, longer hospital stays and new technology.
This analysis stands in stark contrast to the Council for Medical Schemes’s argument that medical schemes’ increasing hospital expenditure has been driven by the lack of competition in the hospital market, giving the few players in this industry the power to set prices.
The sector is dominated by three JSE-listed companies: Medi-Clinic, Netcare and Life Healthcare.
She said this view was at odds with a host of decisions taken by the Competition Tribunal, which had given the go-ahead to a slew of hospital mergers opposed by the Competition Commission. The tribunal had found no evidence that the se mergers would have an adverse effect on prices, she said.
Earlier in the day, health director-general Precious Matsoso said the government was looking for ways to contract services from the private sector to improve citizens’ access to healthcare, since the state had limited staff and facilities. The government was planning to start with general practitioners but also wanted to contract with specialists and private hospitals in due course, she said.
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